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Las Vegas forclosures are so comparativly cheap. But is it a good place to invest?

Houses that sold new in 2006 for 325K can now be purchased for 75-85K. I am considering buying a few as rental properties. I am told the rental market is strong with the average 3br. 2.5 ba. 1,300 sq. ft. renting for about 1,200.00 a month. My concern is there are so many foreclosures available, how long is it going to take for LV to rebound and LV is #6 on Homeland security likely target list. Any advise would be greatly appreciated.

Answers (8)

To invest implies getting a return both on capital and of your capital. LV is going to see a further drop in prices. That means your capital will decrease. That is a bad investment. Add in around 10% transaction costs and it looks even worse.

Linda has been saying it is a good time to buy in LV since the bubble popped. She has no credibility in her financial investment advice left at this point after being so wrong for so many years.

If you're considering buying rental properties for rental income plus appreciation in my area...as primary agents for banks and asset managers, we have 100's of Exclusive REO's and Approved Short Sales Listings!

Consider this...if folks who successfully completed a short sale or were foreclosed on several years ago and had their debts discharged in bankruptcy in 05, 06, 07...they are now able to purchase at 1/4 the price of what they lost their home at if they bought in the highs, with their rebuilt good credit of Fico of 640 or better with steady employment with FHA Loan of only 3.5% down! With many folks getting back into the real estate market at rock bottom prices and low mortgage rates...what do you think will happen from here?

At a recent brokers convention a BofA spokesperson predicted a 10% jump in re prices in 2012.

Are you looking for aggressively priced REO's and Approved Short Sales in my area?

I think the first thing we need to figure out is what is your main goal, rental income or appreciation? If you are looking for immediate rental income, we can accomplish that all day long, at healthy returns. If you are looking for appreciation, there are areas of Las Vegas that are actually appreciating. If you want, shoot me an email or call me and I can tell you what I see everyday as the Broker of Southern Nevada Property Management.

If you are like the investors I am working with now, income analysis tells the story. Currently, it is cheaper to own than to rent in LV. Not only does that mean that people can buy and save on their monthly payment, but to an investor like yourself, that means POSITIVE CASHFLOW even on leveraged proerties!!. I have investors currently that are making DOUBLE DIGIT RETURNS on their investments, and still have the real estate as an asset.

I just ran analysis of a rental I am personally considering purchasing personally. It is a 3 bed 2 bath one-story townhouse with a 2 car garage in an area I personally believe to be a "good" neighborhood. I can purchase it with 20% down and have a positive cashflow of $300/month, which is about a 15% return annually. But to accomplish my goals of OWNING real estate and not having mortgages, I plan to use $200 of the $300 excess towards paying down the principal. By following this plan and using a bi-weekly payment plan, we will have each rental paid off in just over 13 years. Do that a dozen times and I have financial freedom in my 40's.

Not counting any assumption of future appreciation in 13 years, I will have just spent $25K of my money to own a property currently worth $105k (which is possibly at some of the lowest values I will see in the LV valley).

Another point to consider is if you think inflation is going to affect interest rates in the next few years as that will take a toll on your buying power as well.

Buy where growthi is limited, either from build out or growth controls.

There has been SOOOO much speculation building in the last 10 years, LV will be the last place to recover, IMHO. Montana does not have the foot traffic but I would buy there before LV.

Real estate 101 says, as an investor, its better to own 1/10 of a home in Beverly Hills than one home in an area like Las Vegas, where building potential is unlimited, driving land values down to zero and below.

Dont believe ? We had the same thing happen in the Antelope Valley, near LA...

Zillows 10 year charts show if you bought ten years ago you would break even if you bought in the Antelope Valley, lose money in LV, but your $100 investment in BH would be worth $180 today.

All adversites that make a place seem undesirable makes it better for the investor. Look and see the prices these homes were going for before 2006. These are not actual prices , they are peak prices. The actual price may be 40 to 50k over the forclosure price. Use that as a rule of thumb. Call for rent signs and go on Craigslist. Just by skimming I saw 3 and 4bd. going anywhere from $800 to $1600. You know the area and can get a better comparison. I see 7 units on there for 72K, 2 houses 3units in 1 and 4 in the other. That seems like a good buy. Baywestlasvegas@gmail.com. I am in St. Louis and have no affiliation with the seller.

After all you are in Vegas and not Montana. There is always going to be a flow of people.